WhatsApp's recently launched digital payments system for Brazil has been suspended merely one week after its launch. The decision was handed down yesterday by Brazil's Administrative Council for Economic Defense (CADE) and the country's Central Bank, both of which are concerned about how it could harm competition with existing institutions in the domestic market.
Both agencies are seeking to get more information on the precise business model and other details regarding WhatsApp's payments system from companies participating in the effort, including Facebook and partner creditor Cielo S. A. To proceed, the companies will need to appeal CADE's decision, and a fine may be imposed against the companies for rolling it out without the agency's approval — though based on Folha de S.Paulo's reporting, it isn't clear if the system will ultimately require their authorization or regulation. Apparently, it comes down to how the payments are processed, which isn't clear to regulators.
Whatsapp had more than 120 million users in Brazil as of 2017, which is over half the country's total population. Anti-competitive concerns are real when you're dealing with numbers like that, but it's worth pointing out that Brazil's Central Bank, which is involved in this decision, is also working on its own payment system called Pix,
- Folha de S.Paulo